The Top 250 Most Popular Current Financial Terms

The vast majority of the financial terms you will ever need!

by

Owen Jones

Copyright

Copyright © Owen Jones 2025

Megan Publishing Services

https://meganpublishingservices.com

All Rights Reserved!

Introduction

Why Learning Financial Terms Can Boost Your Wealth In today’s fast-paced world, financial knowledge is more than just a nice-to-have—it’s essential. Whether you're budgeting, investing, or planning for retirement, understanding basic financial terms can make a significant difference to your financial wellbeing.

For example, knowing what terms like compound interest, inflation, or diversification mean can help you make smarter decisions. If you understand how compound interest works, you're more likely to start saving earlier—and let time and interest grow your money. Similarly, understanding inflation explains why keeping your money in a low-interest account will actually reduce its value over time.

Even everyday choices—like choosing a credit card—become clearer when you know the difference between APR and interest rate. And if you're thinking of investing, grasping the basics of risk tolerance, assets, and liquidity can help you build a stronger, more profitable portfolio.

Moreover, recognising these terms empowers you to ask the right questions when talking to banks, advisers, or even reading the financial news. You're less likely to be misled, and far more likely to spot a good deal—or a bad one.

In short, learning the language of money gives you control over your finances. It helps you save more, avoid costly mistakes, and even grow your wealth over time.

The best part? You don’t need a finance degree—just curiosity, a little time, and a good guide, like this one ☺

Good Luck, Owen Jones

List of Popular Current Financial Terms

1. Account: A record where financial transactions are stored.

2. Accrued Interest: Interest accumulated but not yet paid.

3. Adjustable Rate Mortgage (ARM): A mortgage with a changing interest rate.

4. Adjusted Gross Income (AGI): Income minus eligible deductions, used for tax purposes.

5. Amortization: Gradual reduction of a loan over time.

6. Annual Percentage Rate (APR): Annual cost of borrowing as a percentage.

7. Annual Percentage Yield (APY): Effective annual return, considering compounding.

8. Annuity: Regular payments made over time, often for retirement.

9. Appreciation: Increase in an asset's value over time.

10. Arbitrage: Buying and selling to profit from price differences across markets.

11. Assets: Resources owned that hold value.

12. Audit: Official review of financial records.

13. Auto Loan: Loan specifically for vehicle purchase.

14. Average Daily Balance: Average account balance over a period, often for interest.

15. Balance Sheet: Financial statement showing assets, liabilities, and equity.

16. Balloon Payment: Large payment due at the end of a loan term.

17. Bankruptcy: Legal process for individuals or businesses unable to repay debts.

18. Basis Point: One-hundredth of a percentage point.

19. Bear Market: Market experiencing a decline.

20. Beneficiary: Person designated to receive benefits, like insurance or inheritance.

21. Bond: Debt investment with periodic interest payments.

22. Brokerage Account: Account for buying and selling securities.

23. Budget: Plan for managing income and expenses.

24. Bull Market: Market experiencing growth.

25. Buy and Hold: Investment strategy of holding assets long-term.

26. Buyback: When a company repurchases its own shares.

27. Callable Bond: Bond that can be redeemed by the issuer before maturity.

28. Capital: Wealth used for investment or business purposes.

29. Capital Gain: Profit from selling an asset at a higher price than bought.

30. Capital Loss: Loss from selling an asset at a lower price than bought.

31. Cash Flow: Net amount of cash moving in and out of business or account.

32. Certificate of Deposit (CD): Savings account with a fixed interest rate and term.

33. Checking Account: Bank account for regular withdrawals and deposits.

34. Collateral: Asset pledged to secure a loan.

35. Commission: Fee paid to agents or brokers for services.

36. Compound Interest: Interest calculated on initial principal and accumulated interest.

37. Consumer Debt: Personal debt incurred for consumption.

38. Cost Basis: Original value of an asset for tax purposes.

39. Coupon Rate: Annual interest rate paid on a bond.

40. Credit: Borrowing capacity or money loaned with future repayment.

41. Credit Card: Card allowing borrowing for purchases with a set limit.

42. Credit Limit: Maximum amount available to borrow on a credit card or line.

43. Credit Report: Record of an individual’s credit history.

44. Credit Score: Numerical representation of creditworthiness.

45. Currency: Money in circulation in a country.

46. Current Assets: Assets likely to be used or converted to cash within a year.

47. Current Liabilities: Obligations due within a year.

48. Custodial Account: Account managed by an adult for a minor.

49. Debenture: Unsecured bond backed by the issuer’s credit.

50. Debt: Money owed to another party.

51. Debt Consolidation: Combining multiple debts into one loan.

52. Debt-to-Income Ratio: Ratio of debt payments to income, used for creditworthiness.

53. Default: Failure to fulfil a financial obligation.

54. Deferred Income: Income received in advance but not yet earned.

55. Deficit: When expenses exceed revenue.

56. Depreciation: Reduction in an asset’s value over time.

57. Derivatives: Financial instruments derived from other assets.

58. Diversification: Strategy of spreading investments to reduce risk.

59. Dividend: Distribution of a portion of a company’s earnings to shareholders.

60. Dividend Reinvestment Plan (DRIP): Program to reinvest dividends into additional shares.

61. Dow Jones Industrial Average: Stock market index tracking 30 major U.S. companies.

62. Earned Income: Income from employment or work.

63. Earnings: Profit after expenses.

64. EBITDA: Earnings before interest, taxes, depreciation, and amortization.

65. Emergency Fund: Savings set aside for unexpected expenses.

66. Equity: Ownership in an asset after liabilities are accounted.

67. Escrow: Holding funds by a third party until terms are met.

68. Exchange Rate: Value of one currency against another.

69. Expense: Cost incurred in earning revenue or operating.

70. Fiduciary: Person or entity responsible for acting in someone’s best interest.

71. Financial Literacy: Understanding financial principles and management.

72. Financial Plan: Roadmap for managing finances to achieve goals.

73. Fixed Assets: Long-term tangible assets used in business.

74. Fixed Costs: Expenses that don’t change with production levels.

75. Foreclosure: Legal process for a lender to take property due to non-payment.

76. Foreign Exchange (Forex): Market for exchanging currencies.

77. Free Cash Flow: Cash generated by business operations, minus capital expenditures.

78. Gross Income: Total income before deductions or taxes.

79. Hedge: Investment made to reduce risk of loss.

80. High-Yield Savings Account: Savings account with a higher interest rate.

81. Home Equity Loan: Loan secured by the equity in one’s home.

82. Income Statement: Financial statement showing income and expenses.

83. Index Fund: Fund designed to match or track a market index.

84. Individual Retirement Account (IRA): Retirement savings account with tax benefits.

85. Inflation: Increase in prices over time, reducing purchasing power.

86. Initial Public Offering (IPO): First sale of a company's stock to the public.

87. Instalment Loan: Loan repaid over time with set payments.

88. Interest: Cost of borrowing money or earnings on deposits.

89. Interest Rate: Percentage charged on borrowed money.

90. Investing: Allocating money with the goal of generating profit.

91. Investment Portfolio: Collection of investments owned by an individual or entity.

92. Invoice: Bill issued by a seller to a buyer for goods or services.

93. Joint Account: Account shared by multiple people, typically for shared finances.

94. Lender: Person or institution that provides money to borrow.

95. Liabilities: Financial obligations or debts owed by an individual or entity.

96. Line of Credit: Flexible loan that allows borrowing up to a limit.

97. Liquidity: Ease with which an asset can be converted to cash.

98. Loan: Money borrowed with a promise to repay over time with interest.

99. Long-Term Debt: Debt due in more than one year.

100. Market Capitalization: Total market value of a company's outstanding shares.

101. Market Index: Measure of a section of the stock market, like the S&P 500.

102. Market Price: Current price at which an asset or service is bought or sold.

103. Market Value: Estimated amount an asset would sell for on the open market.

104. Maturity Date: Date when a debt or bond is due to be repaid.

105. Merger: Combining two companies into one entity.

106. Microloan: Small, short-term loan, often for small businesses.

107. Monetary Policy: Central bank actions to control money supply and interest rates.

108. Money Market Account: Savings account with a higher interest rate and check-writing.

109. Mortgage: Loan for purchasing real estate, secured by the property itself.

110. Mutual Fund: Investment fund pooling money to buy a diversified portfolio.

111. Net Income: Profit after all expenses, taxes, and costs.

112. Net Worth: Difference between assets and liabilities, indicating wealth.

113. Nominal Interest Rate: Interest rate before adjusting for inflation.

114. Non-profit Organization: Entity operating for public benefit, not profit, but may still pay founders and admin officers very high salaries.

115. Open-End Fund: Mutual fund without restrictions on the number of shares.

116. Operating Income: Income from core business operations.

117. Option: Contract to buy or sell an asset at a set price before expiry.

118. Outstanding Shares: Shares currently held by all shareholders.

119. Overdraft: When withdrawals exceed available funds in an account.

120. Par Value: Face value of a bond or stock.

121. Partnership: Business owned by two or more people.

122. Pension: Retirement plan providing periodic payments post-retirement.

123. Personal Loan: Loan given for personal, non-business-related expenses.

124. Portfolio: Collection of investments held by an individual or institution.

125. Preferred Stock: Stock with fixed dividends, paid before common stock.

126. Premium: Cost paid for insurance or above par for bonds.

127. Principal: Original amount of money invested or loaned.

128. Private Equity: Investment in private companies not publicly traded.

129. Profit Margin: Percentage of revenue that remains after expenses.

130. Promissory Note: Written promise to pay a specific amount by a certain date.

131. Public Company: Company with shares traded on public exchanges.

132. Rate of Return: Percentage gain or loss on an investment over time.

133. Recession: Period of economic decline and reduced activity.

134. Refinancing: Replacing an existing loan with a new one at different terms.

135. Return on Investment (ROI): Measure of profit relative to investment cost.

136. Revenue: Income generated from sales or business activities.

137. Risk: Potential for financial loss or gain in an investment.

138. Risk Tolerance: Investor’s comfort level with potential losses.

139. Roth IRA: Retirement account with tax-free withdrawals after retirement.

140. Savings Account: Bank account with interest, meant for saving money.

141. Secured Loan: Loan backed by collateral.

142. Securities: Financial instruments like stocks, bonds, and options.

143. Shareholder: Person owning shares in a company.

144. Short Sale: Selling an asset with plans to repurchase it at a lower price.

145. Simple Interest: Interest calculated only on the principal amount.

146. Sinking Fund: Reserve fund to repay debt or bond obligations.

147. Social Security: Government program providing retirement and disability benefits.

148. Sole Proprietorship: Business owned by one person.

149. Speculation: High-risk investment for significant returns.

150. Standard Deviation: Measure of investment volatility and risk.

151. Stock: Ownership in a company, representing a share of assets and profits.

152. Stock Dividend: Payment to shareholders in additional shares rather than cash.

153. Stock Split: Increasing shares by dividing existing shares.

154. Subsidy: Government financial support for economic activities.

155. Subprime Loan: Loan given to borrowers with lower credit scores.

156. Supply and Demand: Market forces determining price based on availability and desire.

157. Tax Bracket: Income range subject to a specific tax rate.

158. Tax Deduction: Expense subtracted from gross income to reduce tax owed.

159. Tax Refund: Return of excess tax paid to the government.

160. Term Loan: Loan with a specified repayment period.

161. Times Interest Earned: Measure of a company’s ability to meet interest obligations.

162. Total Return: Overall profit from an investment including dividends and interest.

163. Trade Balance: Difference between a country’s exports and imports.

164. Trading Volume: Quantity of shares or contracts traded in a period.

165. Treasury Bond: Long-term government bond with interest payments.

166. Trust Fund: Assets held in a trust for a beneficiary.

167. Underwriter: Party assessing and assuming risk for financial offerings.

168. Unemployment Rate: Percentage of the labour force that is jobless.

169. Unit Trust: Pooled investment with returns divided among unit holders.

170. Unsecured Loan: Loan not backed by collateral.

171. Valuation: Process of determining an asset’s worth.

172. Variable Costs: Costs that vary with production levels.

173. Venture Capital: Funding for startups or new companies with high growth potential.

174. Volatility: Measure of price fluctuation in a market or investment.

175. Wage Garnishment: Legal withholding of wages to pay off debt.

176. Wealth Management: Financial planning for asset growth and preservation.

177. Weighted Average: Average where values are assigned relative importance.

178. Withholding Tax: Tax withheld by an employer or payer on behalf of the government.

179. Working Capital: Current assets minus current liabilities, for operations.

180. Yield: Earnings from an investment, expressed as a percentage.

181. Yield Curve: Graph showing bond yields over different maturities.

182. Zero-Coupon Bond: Bond sold at a discount with no periodic interest.

183. 401(k): Employer-sponsored retirement savings plan with tax advantages.

184. 403(b): Tax-sheltered retirement plan for certain public employees.

185. 529 Plan: Tax-advantaged savings plan for education.

186. AB Trust: Estate planning trust for married couples.

187. Asset Allocation: Dividing investments among asset categories.

188. Bear Spread: Strategy for profiting from a falling market.

189. Benchmark: Standard for evaluating investment performance.

190. Beneficiary Designation: Named individual to receive assets after death.

191. Black Swan Event: Rare event with significant impact.

192. Blue Chip: Large, reliable company with consistent performance.

193. Capital Appreciation: Increase in investment value over time.

194. Capital Expenditure: Funds used for acquiring or upgrading assets.

195. Cash Equivalent: Asset easily convertible to cash, like treasury bills.

196. Charitable Trust: Trust to donate assets for charitable causes.

197. Corporate Bond: Bond issued by a corporation to raise capital.

198. Coverdell ESA: Education savings account with tax benefits.

199. Credit Union: Non-profit financial institution owned by members.

200. Current Yield: Bond’s annual return based on current price.

201. Deflation: Reduction in prices, increasing currency value.

202. Dividend Yield: Annual dividends per share as a percentage of share price.

203. Duration: Measure of bond sensitivity to interest rates.

204. Economic Cycle: Stages of economic growth and contraction.

205. Electronic Funds Transfer (EFT): Digital transfer of money.

206. Employer-Sponsored Plan: Retirement plan through an employer.

207. Equity Crowdfunding: Raising funds by selling shares to public investors.

208. Estate Planning: Preparing for the transfer of assets after death.

209. FICO Score: Common credit score indicating creditworthiness.

210. Fundamental Analysis: Evaluating stocks based on financial and economic factors.

211. Gift Tax: Tax on money or property given to others.

212. Health Savings Account (HSA): Tax-advantaged medical savings account.

213. Holding Period: Length of time an investment is held.

214. Insolvency: Inability to meet financial obligations.

215. Internal Rate of Return (IRR): Investment’s profitability measure.

216. Investment Bank: Financial institution assisting in capital raising.

217. IRA Rollover: Moving retirement funds from one account to another.

218. Key Person Insurance: Policy for vital employees in a business.

219. Liquidity Ratio: Measure of ability to cover short-term obligations.

220. Management Fee: Fee for managing investments in a fund.

221. Money Market Fund: Mutual fund for short-term, low-risk securities.

222. Non-Callable Bond: Bond that cannot be redeemed early by issuer.

223. Owner’s Equity: Value of an owner’s stake in a business.

224. Passive Income: Earnings from rental property, dividends, or limited work.

225. Payment History: Record of payments on debts, impacting credit score.

226. Prepaid Expenses: Expenses paid in advance of the benefit received.

227. Put Option: Right to sell an asset at a set price before expiry.

228. Recapitalization: Altering a company's capital structure.

229. Replacement Cost: Cost to replace an asset at current prices.

230. Revenue Bond: Municipal bond backed by project revenues.

231. Reverse Mortgage: Loan for seniors, repaid when the borrower moves or dies.

232. Risk Premium: Return above risk-free rate to compensate for risk.

233. Savings Bond: Government bond for saving, with low interest.

234. Secured Credit Card: Card requiring a security deposit.

235. Sharpe Ratio: Measure of return relative to risk.

236. Short-Term Debt: Debt due within one year.

237. Socially Responsible Investing: Investing aligned with ethical values.

238. Stock Option: Contract giving the right to buy/sell stock at a set price.

239. Takeover: Acquiring control of a company by purchasing its shares.

240. Target-Date Fund: Fund designed to change asset mix by retirement date.

241. Tangible Asset: Physical asset, like real estate or machinery.

242. Tax Credit: Amount subtracted directly from owed tax.

243. Thrift Savings Plan (TSP): Retirement plan for federal employees.

244. Traditional IRA: Retirement account with tax-deferred contributions.

245. Trustee: Person managing assets on behalf of beneficiaries.

246. Turnover: Rate of buying and selling assets in a portfolio.

247. Underemployment: Working below skill level or fewer hours than desired.

248. Unrealized Gain: Profit not yet actualized by selling an asset.

249. Warrants: Right to purchase shares at a specified price.

250. Zero-Coupon Bond: Bond bought at discount, no periodic interest, pays at maturity.

This list has been extracted from a book by Owen Jones called:

Personal Finance, Budgeting, and Money Management

Mastering Your Financial Future!

Here are three quotes from a recent podcast on the manual:

🗣️ Quotes from Podcast Host at:

https://owenjones.substack.com/p/personal-finance-budgeting-and-money

1] “Personal finance is not just about numbers; it's about creating a life where you have the freedom to pursue your passions without financial worry.”

2] “With the right knowledge and guidance, anyone can achieve financial independence.”

3] “The goal is to help you live within your means while still enjoying life.”

You can read more about it on the author’s blog here:

MPS: https://meganpublishingservices.com

The ebook costs $2.99 at Barnes & Noble – click here:

Contact Details

BlueSky: owen-author.bsky.social

Facebook: AngunJones

Instagram: owen_author

LinkedIn: owencerijones

Pinterest: owen_author

Substack: https://substack.com/owenjones

TikTok: @owen_author

X: @owen_author

Blog: Megan Publishing Services